GST impact: Maharashtra govt hikes registration tax on motor vehicles

Mumbai: The Maharashtra government has increased the one-time registration tax on private two- and four-wheelers by 2 percent.

The hike was approved by the Maharashtra Cabinet on Monday to compensate for the loss of revenue due to the abolition of octroi and local body tax following the implementation of the Goods and Services Tax (GST), an official from the transport department said today.

The government has, however, capped the tax amount for high-end imported cars at Rs 20 lakh as against 20 percent of the total car cost that was being charged earlier.

"There were instances of imported vehicles (bought by people in Maharashtra) being registered in other states where taxes are lower. This was causing revenue loss to the state exchequer," the official explained.

"To avoid this, the government has decided to cap the tax on high-end imported cars at a maximum of Rs 20 lakh, irrespective of the car price," he said.

The official said that earlier, the registration tax on two- and three-wheelers was 8-10 percent, which has now been hiked to 10-12 percent.

The cars running on petrol were earlier levied 9-11 percent tax, which has been raised to 11-13 percent.

For the cars running on diesel, the registration tax was around 11-13 percent, which has been increased to 13-15 percent.

For CNG or LPG cars, the tax has been increased to 7-9 percent, from the earlier 5-7 percent, the official added.